Positive Prospects for Sino-Indian Relations under Xi and Modi?

By Amitha Rajan

Xi and Modi meet for the first time in Brazil. Source: @PMOIndia
Xi and Modi meet for the first time in Brazil. Source: @PMOIndia

September is the busiest month for India’s foreign office. By the end of the month, Prime Minister Narendra Modi will have visited Japan and the United States and hosted Australian Prime Minister Tony Abbott and Chinese President Xi Jinping. In this list of big-ticket names, Mr Xi’s visit, scheduled for the 17th of this month, is the one diplomatic visit that is likely to be most closely watched.

For decades, harsh political realities have clouded Sino-Indian relations. China and India are nuclear-armed neighbours with a contested border running more than 3,000 kilometres. They went to war in 1962 over their border dispute. The countries have competing claims over Indian-administered Arunachal Pradesh – known as South Tibet in China – and military build-up continues on both sides. China’s tacit support for Pakistan has long been a cause for concern in India, while New Delhi’s sheltering of the Dalai Lama continues to irk Beijing. But with a new leadership at the helm in both countries, there is room for this relationship to improve.

Mr Xi and Mr Modi have good reasons to cooperate. Both leaders are strong supporters of economic reform and face the challenge of bridging a gaping domestic income divide. They are keenly aware that their legitimacy is tied to the state of their domestic economies. Trade and commerce will therefore occupy a large chunk of the agenda during Mr Xi’s visit. Initial exchanges between the two leaders have been encouraging. At the sidelines of a summit for BRICS countries (Brazil, Russia, India, China and South Africa) in July – in which it was decided that China will host a BRICS bank for which India will serve as president – Mr Xi invited Mr Modi to the Asia-Pacific Economic Cooperation meeting that China will be hosting in November. It is the first time that India has been invited to an APEC meeting.

The past few months have witnessed exchanges between foreign ministers, deputy heads and the military establishment of both countries. For instance, China’s foreign minister Wang Yi visited India in June weeks after Mr Modi assumed office, laying the groundwork for Mr Xi’s first diplomatic visit to India. Ajit Doval, Mr Modi’s National Security Advisor, was in China last week where he met Mr Xi. Chinese state media have publicised Mr Doval’s visit as a symbol of the significance New Delhi attaches to Mr Xi’s time in India. These initiatives have come as Beijing views Mr Modi as someone who is open to doing business with China. Indeed, after his election one state-run Chinese newspaper called Mr Modi “India’s Nixon” who could provide the much needed boost to Sino-India relations.

There is immense speculation over trade deals during Mr Xi’s visit, particularly after Mr Modi’s visit to Japan. Mr Modi came away with assurances of up to $35 billion in investments over the next five years for the development of smart cities, technological and financial assistance for India’s high-speed rail network, and a clean up of the Ganges river, his pet project. Beijing appears eager to beat Japan’s offer, with China’s consul-general in Mumbai estimating trade deals worth about $100 billion for projects such as the construction of industrial parks, and upgrading railways networks and highways in India.

However, realpolitik concerns could hamper real progress in this bilateral relationship. Ahead of Mr Xi’s visit, reports emerged of incursion by nearly 200 Chinese soldiers into Indian-administered Ladakh in the state of Jammu and Kashmir, mirroring incidents in 2013 that led to a tense standoff between both countries. India views such infringements in the broader context of China’s aggressive approach to its territorial claims in the region. While Mr Modi remains keen on capitalising on any business opportunities that come his way, he is also pursuing balance-of-power politics in Asia. His successful visit to Japan was followed by trade agreements with Vietnam that strengthened defence ties and deals to explore oil in the South China Sea, a sensitive issue for China. During his visit to Japan, Mr Modi also spoke of the need for Japan and India to ensure peace and progress in the Asian century by focusing on trade rather than the expansionist ideas of the 18th century – a turn of phrase that is being interpreted as a reference to China.

While both Mr Xi and Mr Modi have emphasised economic diplomacy in their foreign policies, they also have their domestic audiences to consider. In particular, over matters of strategic interest both leaders tend to adopt a nationalistic stance. The way they handle their disagreements will depend on whether the pragmatism of Mr Xi and Mr Modi as businessmen prevails or their nationalism as domestic politicians takes over.

Amitha Rajan is a former journalist and editor. She recently completed a master’s degree in International Studies and Diplomacy from the School of Oriental and African Studies, London. You can follow her at @amitha_rajan

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